SHAH ALAM: The government has decided that RMAF will operate at least twelve Leonardo AW149 utility helicopters under a leasing programme mooted by the Prime Minister’s Department and the National Security Council, Armed Forces chief General TS Mohammad Ab Rahman said today.
He said the leasing programme would go ahead of the procurement of the twelve units of combat search and rescue helicopters announced in the 2024 budget presentation. It must be noted that the AW149 is already a mil spec helicopter but being a lease aircraft it is unlikely that the aircraft could be armed or fitted with mil stuff apart from the ones already installed. Bomba currently operates a single AW189 helicopter – the civilian version of the aircraft – following the crash of another example, last year. The government also procured four AW189 helicopters for the MMEA last year.
“The government has ordered the RMAF to follow a leasing programme for helicopters for ministries and government agencies co-ordinated by the Public-Private Sector Unit of the Prime Minister’s Department (JKAS) and National Security Council,” he told reporters after the Armed Forces Day demonstration held at Port Dickson, Negri Sembilan.
He said JKAS has decided that the Leonardo AW149 helicopter was the solution for the leasing programme. The helicopter he added was capable of conducting search and rescue and utility operations.
“The Cabinet will make the final the decision on the concession agreement for the leasing programe soon,” he added. The talk of the government leasing helicopters made its rounds earlier this year when a picture of the proposal letter was published on social media. The number of helicopters to be leased was supposed to be around 20 to 30 for at least eight years.
It is unclear whether the budget allocated for the 12 CSAR helicopters – some RM2.8 billion as revealed by Defence Minister DS Khaled Nordin earlier this year – has instead been shifted to other projects (like LMS Batch 2, announced in the 2023 budget). As you are aware, the payment for leasing will come under the operational budget instead of the development budget (which the 12 CSAR helicopters were supposed to come under).
Meanwhile, Mohammad said the Army is still waiting for the four Black Hawk to be leased from Aerotree Defence and Services Sdn Bhd. He said if the company failed to deliver by the end of the month, the contract may be terminated.
— Malaysian Defence
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Good. This would reduce the workload on the caracal. They should focus on CSAR while the AW149 could be tasked on general transport
Could it be to supplement the already leasing AW139 in service perhaps?
From FMT
The first phase saw the procurement of 12 units of combat search and rescue helicopters approved in the 2023 budget, while the second phase will involve the purchase of Leonardo AW 149 helicopters under a public-private initiative
https://t.co/8j8gYr1TC9
The plan. Seems TUDM AW149 will be additional to this.
RM16.8 Billion (USD4 billion) for 15 years
https://pbs.twimg.com/media/GZIqh2RbkAAkPik.jpg
That is an absolute waste of money for just 28 helicopters.
The Philippines recently (2022) bought 32 brand new S-70i Blackhawks for just USD624 million.
https://t.co/fi0n2V6AZ5
So, where do we find 12 AW149? Weststar do have AW189 but doesn’t add up to 12 unit…
So, 12 leased AW149 + 12 brand new CSAR heli (EC 725 perhaps). Ok lah. At least can reduce the load of other helis.
>4 billion over 15 years
>624 million one off procurement that doesn’t account for parts and maintenance over 15 years
Even if I don’t necessarily agree with how madani gomen do things the way you try to villify them is disingenuous
Something nobody really thought about…
When multiple billion ringgits of OPEX allocation is used to get these helicopters (which has never been done before in this massive scale), that is billions of ringgit less to fuel our ships to patrol the seas, less money for salaries and pensions, less money to fly our fighter jets. This will severely compromise our regular defence mission and operations.
IF you think they will pay to buy another 12 CSAR helicopters after the leasing deal goes through, I have a bridge to sell to you. The leasing deal is clearly meant to nuke any new utility helicopter purchase in the future.
@ dundun
Parts & maintenance for 15 years does not cost USD3.3 billion over 15 years.
This is example for 1 AW139
https://www.aircraftcostcalculator.com/AircraftOperatingCosts/424/Leonardo-Agusta+Westland+AW139
LEONARDO/AGUSTA Westland AW139
Flying 300 Hours per Year
Total Fixed Cost (this if buy with loan)
$831,946.00
Total Variable Cost
$652,800.00
Annual Budget
$1,484,746.00
Total Hourly Cost
$4,949.15
Components of Variable Cost
Fuel Expenses: The highest variable cost, fuel expenses, fluctuate based on flight duration, aircraft type, and fuel prices at the time of refuelling.
Maintenance and Repairs: While some maintenance is periodic, the cost often varies with usage, including wear-and-tear repairs, replacement of parts, and labour costs associated with maintenance activities.
Crew Costs: For operators who adjust crew size based on operational demand, expenses related to salaries, training, and accommodations can vary.
Landing and Handling Fees: Charges incurred for landing, parking, and ground handling services at airports, which can vary depending on the airport and the frequency of operations.
Catering and Onboard Services: Costs associated with providing food, beverages, and other amenities to passengers, which can vary with each flight based on client requests and the length of the journey.
For simplicity sake, i will just assume ALL of variable cost is the maintenance and sustainment cost.
1 heli – USD650k x 28 helicopters x 15 years = USD273 million
So maintenance at most is USD273 million, not USD3.3 billion.
So at most for 28 medium lift helicopters, buying and 15 year maintenance & sustainment cost will not be more than USD 1 billion. That helicopters will be yours forever, unlike leasing.
What can we actually buy with the USD 3 billion saved????
Our 2 Scorpenes + Ouessant training sub + submarine facilities in Sepanggar costs USD1.1 billion. If only subs, surely we can have them for USD500 mil each.
4 scorpenes only (no need to build facilities) can be had for USD2 billion.
4 batteries of MERAD could easily be bought for USD500 million. Thailand bought 1 battery of VL MICA for USD110 million.
https://www.shephardmedia.com/news/landwarfareintl/thai-army-unveils-vl-mica-air-defence-system/
4 batteries of shore-based NSM missiles with 200km range for precision strike of both ground and ship targets + extra NSM missiles could be had for USD500 million. Latvia bought 1 battery of NSM for USD110 million
https://www.defensenews.com/global/europe/2023/05/05/latvian-government-approves-110-million-naval-strike-missile-buy/
So for the cost of leasing of 28 helicopters for 15 years, we could actually buy those 28 helicopters outright, buy 4 scorpene submarines, buy 4 batteries of MERAD and buy 4 batteries of NSM coastal defence. This would greatly enhance the defence capability of our military, unlike just leasing helicopters.
And you think i am vilifying them?????
Another thing to ponder
The price of a brand spanking new AW189 is about USD20mil.
The leasing cost USD4 billion for 28 helicopters. That comes out to USD142 million per helicopter over 15 years.
Even if you just buy a totally brand new AW189 every 3 years “pakai buang” no need to service, it would just cost you USD100 million over 15 years.
So where is the logic of this leasing program?
Another hit for CAP55 plan
Leased to owned?
“whether the AW149 or civilian version – the AW189”
Likely its the civvie 189, as afaik the 149 isnt a hot seller so to find 2nd hand used might not be easy. Unless Leo has unsold examples in storage.
“That is an absolute waste of money”
Depends on certain people will look at it, its no waste if its to enrich some crony. One would have questioned, with a fleet of 12 Caracals + to buy 12 CSAR why would they need a lease of 12 more. If its PUTD I can understand but TUDM?
Of course others have have gave it a thought.
What we do with various things has a long term direct impact on others. That’s always been the case and always will be until or unless we start getting serious with defence.
Same with existing stuff. One reason the RMN is so stretched resource wise is the fact that a significant part of the budget goes towards the subs. As it is we barely have enough and subs are inherently expensive. Another example is how the A400M purchase affected other programmes and how the resources allocated towards upstanding and sustaining them have affected other things.
If we ever do get the Kuwaiti Hornets.we’ll be in n the same rut unless sufficient funds are allocated to sustain them.
This leasing thing is nothing to shout or blow trumpets
Just like the RMN’s rehulling/repowering thing on various ships which are long overdue for replacement is a disgrace; a sign of of how low we’ve sunk. No doubt the politicians will make the leasing thing look like a sign of progress. Bollocks.
“brand new S-70i Blackhawks for just USD624 million”
Its what I have been pushing all these while, new civvie specced BH for USD $15mil (w/o support or training as we ady have them for VIPHawk), just add on mil spec radios and their good to go for max value for money. The problem is Govt/Chiefs skinflint on budget for PUTD new choppers. Even for lease they were only approved 4units while TUDM out of blue got a dozen leases approved.
They will not be buying another 12 helicopters for TUDM lah. It is just talk.
No lah, leased until contract expires then the helicopters will revert to the company.
RMAF and her sister services dont want to lease anything. It is the government which decided on the lease programmes.
To get a real estimate of how much anything will cost; entails not only looking at the on paper purchase cost but also factoring in the cost of spares/support [including inflation] for say a projected service life of 20 years; including the cost of sustaining something as it ages.
P
The acquisition + sustainment cost of a medium lift helicopter (excluding actual fuel+salary costs) for 15 years period does not cost 7x the value of the brand new helicopter itself.
If that is true, it would be cheaper to just buy a new medium lift helicopter every 3 years and be done with it.
If that is also true, nobody would keep a helicopter more than 3 years, as it is cheaper just to buy another new helicopter rather than maintain it.
Whatever it is, USD4 billion to lease 28 helicopters for 15 years is illogical and an utter waste of taxpayers money.
Poland bought 32 AW149 for EUR1.76 billion
” The contract signed in Świdnik in 2022 & also covers the integration of the helicopter’s systems, dedicated armament, future modernisations & technical support through the entire life cycle of the Polish AW149 fleet ”
So that EUR1.76 billion includes fully paid for upfront of the full sustainment of the Polish AW149 fleet until it is retired.
Also assembled in country by PZL Swidnik.
All of that stuff still costs less than 50% the lease cost of just 28 helicopters for 15 years.
Basically billions of USD extra given to someone to make him a multi billionaire rather than use that money to get more things to defend our maritime domain.
https://t.co/8SppY6Ff0H
Anyways I thought helo would require heavy MRO every decade of so and in some publicly available sources the MRO could cost as much as a new helo. Which is why RMN and SK end the services of lynx and blackhawk by it’s 20th birthday. No?
Anyway I can kinda understand the appeal of leasing. The gov due to financial responsibility act cannot make more debt, debt is what fuel their development budget.
With leasing they only need to pay MYR 266 mil per annum for 28 helo compared to upward of MYR 5.6**bil upfront right here right now.
It also mean they have MYR 2.53 bil of development budget to buy other things since the CSAR helo purchase had been nuke.
We have never funded the national security sector through loans and other instruments.
Zaft,
Decision makers can and do come up with dozens of reasons to justify certain decisions. After all they don’t want to spend cash
and they have various reasons related to non military factors. This drives a lot of what we do. The result is the armed forces and taxpayer gets buggered and we have a MAF whose capabilities don’t reflect all we’ve spent on it.
Aircraft require overhaul a and checks after reaching a number of hours or years, which ever comes first.
@marhalim
Yes we don’t do loan for consumption but only for investment particularly infrastructure. But the government still need to build some infrastructure even when they don’t have access to debt financing anymore.
@Hulubalang
Euro 1.76bil for polish AW149 is MYR 8.15 bil. How is that 50% less when you yourself quoted that the leasing for 28 helo would cost MYR 4 billion? If anything it’s look like we paid the same price as the polls but in installments rather than upfront.
>We have never funded the national security sector through loans and other instruments
Good. Loans, bonds and sukuk is reserved for investment and wealth creation. No matter how people look at it, defence acquisition is a sunk cost, something that we need but by itself cannot generate income. That’s what taxpayers money is for
@ darthzaft
Read my comments properly.
RM16.8 Billion (USD4 billion) for 15 years
https://pbs.twimg.com/media/GZIqh2RbkAAkPik.jpg
Zaft,
Nothing related to national security; whether funding for equipment or infrastructure is funded via loans.
“They will not be buying another 12 helicopters for TUDM lah”
This not referring the CSARs rite? Or is that the smoke & mirrors? If its true I would still want the Caracals to be funded for full upgrade into CSAR.
@Zaft
“The gov due to financial responsibility act”
Bollocks! Whether DE or OE the money comes from the same source, its how they slice the GDP pie. And if leasing meant more money is spent, that still means more national debt.
Well on the good side, it still need to be approve by the cabinet
“The Cabinet will make the final the decision on the concession agreement for the leasing programe soon,”
Im sure atleast one yb will question about procurement cost.
what about risks of leasing?
– what would happen to the helicopters if suddenly the company that is leasing it is bankrupt and disappear? It is not something that cannot happen as seen with the training ships, MD530G & coast guard OPV.
– what can or cannot be done to the helicopters? routine maintenance is airforce task or need company employee to do all? what happens to maintenance on overseas deployments, or use during conflict, like lahad datu for example?
– is it considered sovereign government property? or can other foreign government or foreign banks impound it doue to any issues with the leasing company?
– can weapons be installed on them? can the helicopter be used for acts of war?
– what happens in a crash? who is responsible?
Yes this is the CSAR helicopters. The leased helicopters cannot be used for CSAR as it will not be armed.
@Hulubalang
what about risks of leasing?
100% premium for insurance?
On the bright side they totally can buy the valor in 15 years time rather than 30 😁
@joe
Technically leasing is not debt but in practice it kinda like it. Higher cost overall In the long run but *affordable today. For the same price of 12 helo today they can get 24 helo plus some used fighter jet or armoured vehicle or something.
… – ”– what would happen to the helicopters if suddenly the company that is leasing it is bankrupt and disappear?”
What di you think? Obviously, the risks you mentioned are there.
… – ”is it considered sovereign government property? or can other foreign government or foreign banks impound it doue to any issues with the leasing company?”
No; obviously not. Yes it can be impounded if it’s not ”owned” by the company.
… – ”– what can or cannot be done to the helicopters? routine maintenance is airforce task or need company employee to do all? what happens to maintenance on overseas deployments, or use during conflict, like lahad datu for example?”
Routine maintenance; basic ones by the RMAF but also depending on the scope of the contract. Same situation with the training helicopters and the twin engine light planes. As for associated risks; depending what’s laid out in the contract.
We are all well and truly aware of the pitfalls in leasing stuff and no one needs any pitching. Unfortunately however it is what it is.
man – ”still need to be approve by the cabinet”
The cabinet will rubber stamp it …. If past cabinets actually had a say in things; the MAF would not have got various things it did.
man – ”Im sure atleast one yb will question about procurement cost.”
Don’t hold your breath.
dundun – ”Loans, bonds and sukuk is reserved for investment and wealth creation. ”
Long term financing with low interest has been offered by France and South Korea but we’ve never funded a defence buy via loans; whether from abroad or locally.
dundun – ”No matter how people look at it, defence acquisition is a sunk cost, something that we need but by itself cannot generate income.”
Not saying we should but under the right circumstances; it can; to an extent. Having said that; the bulk of off sets/Tots/MOUs we’ve embarked on have been a waste – short term gains benefiting a selected few and nothing tangible in the long turn. Unfortunately there are still some under the illusion that local production and so call ”self-sufficiency” is the way to go when it reality it bleeds the taxpayer.
We lack a clear and holistic policy; lack the resources and economics of scale and fool ourselves into believing we can achieve what we set out to. Hubris; blowing own trumpets and politics takes precedence over substance and the interests of the taxpayer and armed services.
If my memory serves me right, under budget 2024 as announced in 2023, the requirements for TUDM helos is a utility/sar/csar helos and not a pure or separate SAR or CSAR.
“cannot be used for CSAR as it will not be armed”
In that case all the more reasons to fully upgrade Caracals to CSAR spec.
@man
“Im sure atleast one yb will question about procurement cost.”
Its the role of Opposition, no? At least hopefully this round, not make it a circus act like going to town that our subs cannot dive. Or tell the world our premier fighters are down due to want of service. Or implying that LD was just a Hollywood show to boost public image.
Fully upgrading my he Cougars for CSAR to entails a self defence suite. They already have a FLIR, winch, NVG compatible cockpit, etc.
The issue with CSAR is that it requires not just a CSAR configured platform but also other essentials. Unless one is operating in a very permissive environment.
I will also add that part of the reason we hear so much about CSAR is to justify funding. Just like how the RMN mentions Chinese intrusions as one reason why it needs LMSs; part of that he game that is played.
They are also fitted for air to air refueling.
CSAR over enemy territory and against an enemy expecting a CSAR effort and equipped with a IADS and fighters would require CSAR platforms backed by fighters, UASs, a AEW platform and a SEAD/AD capability.
A good example of how challenging and resource intensive CSAR is is the mission to rescue Scott O Grady and that was against the Serbs, not a Tier One military.
I have never understood the TUDM obsession with CSAR when we only have a handful of fighter jets anyway.
Even a huge airforce like USAF only have like 1% of their total strength dedicated to CSAR. Even larger air force like RAF and RAAF does not even have it. Why do we need like 25% of TUDM dedicated to CSAR?
There are ways to mitigate the need for CSAR. One is to get longer ranged strike missiles of 300+km range (storm shadows for example) so our fighter jets does not need to fly over enemy territory/forces. If our fighter jets fly over owr own territory (like Lahad Datu for instance), we dont really need all out CSAR capabilities.
After the Navy helicopter accident, perhaps it’s cheaper to go via leasing?
Nothing to do with that lah.
…
You might never have “understood” it but it’s been pointed out to you that it’s a way to secure funding. Politics at play; not obsession. Same reason why the RMN cited intrusions in the EEZ as a reason why it needs LMS Batch 2s. Doesnt mean in reality that the Batch 2s are being acquired solely for that purpose. Same reason why despite being secondary type combatants and having a 3D radar, obstacle avoidance sonar and various other thing; the Kedahs are designated NGOPVs. If you recall some years ago the RMAF made a case that AEW platforms have a number of peacetime non military utilities ; to justify funding.
On the so called ways to “mitigate “ things; you are making a simplistic comparison.. We’ve been through this before; depending on ROEs, terrain, the type of threat etc, at times a shorter range weapon is more suitable. Also. Unless one has a strike/recce complex; no point having @long range”. Much has been written about Ukraine but a large part why their @long range” stuff has been accurate is because if external help with detecting and fixing targets.
Back to CSAR, you would have noticed that we try to ensure we have a minimal capability in several areas. With zero CSAR capability to speak off in the whole MAF, is is it really surprising that the RMAF would want some level of capability? Hardly an “obsession” …
E
Also, even if our fighters were shot down over friendly territory; the presence of the enemy might call for a “CSAR” tasking.
Obsession over CSAR? it simple really.TUDM wants them and we as civilians cant question their decision really.I mean yeah sure we can ‘discuss’ here whether they need CSAR or not but really if they want them,they sure have the need for them.or what you really thought just because they have now 12 Caracals + 4 leased civilian variant of aw139 they are good to go?..And why pray tell singapore bought 12+ h225m fully kitted when they already have chinooks and what not
Our beloved leader P*X is genius really.When tabling the 2024 budget last year.He said RMAF will get 12 new helicopters.He doesnt said whether new buy or leased so good game from him lol
Firdaus – ”Obsession over CSAR? ”
There is no ”obsession”. It has been pointed out to him why the RMAF has pitched the ”CSAR” angle. Same reason behind the designations of other things and the stated need; to make them more palatable to the decision makers who are more receptive to new capabilities [find out why the Kasturis became ”corvettes” after initially becoming ”light frigates”]; as well a capabilities which have a civilian or peacetime utility.
Firdaus – ”And why pray tell singapore bought 12+ h225m fully kitted when they already have chinooks and what not”
The Chinooks are for heavy lofting but if needed can also do SAR/CSAR.
kamal – ” the requirements for TUDM helos is a utility/sar/csar helos”
For a multi-role helicopter which can perform various roles; including CSAR. CSAR is a new capability; easier to make a case for funding. Hence the mention of CASR which is a capability the RMAF also wants; like it wants other capabilities. Not much differentiates a CASR platform from a non CASR platform : glass cockpit; FLIR, winch/hoist, searchlight; NVG compatible cockpit. etc. There are various add ons like a AAR capability and a self defence suite.
firdaus – ”He said RMAF will get 12 new helicopters.”
I believe [could be wrong] that when he announced it; the intention was to purchase the 12 but the plan changed.